PhillyDeals: Philadelphia builders scrambling to stay busy

The Convention Center expansion project at Broad and Arch Streets is expected to be completed in the spring.

By Joseph N. DiStefano, Inquirer Staff Writer

Posted: August 29, 2010

The biggest projects in Philadelphia construction are winding down, and contractors are scrambling to stay busy as high-rise proposals such as Cira South and the American Commerce Center remain stalled for lack of tenants and financing.

The quarter-billion-dollar renovation of the Depression-era 30th Street Post Office has come in "on time and under budget," owner Brandywine Real Estate Trust said last week.

The Internal Revenue Service is moving 5,000 workers to the block-long monument, vacating its old home at 11501 Roosevelt Blvd. That property's owner, Cedar Shopping Centers Inc., of Port Washington, N.Y., isn't sure what it can build there, or when, chief executive officer Leo Ullman told me.

Philadelphia general contractors Keating Development Co. and Perini Corp.'s Keating Building Corp., worked on the post office job, where Keating Development played so many roles its "apparent conflict of interest" was cited in a 2007 U.S. Inspector General's report. Both firms are also approaching next spring's target completion of the hulking nearly $800 million Convention Center expansion to Broad Street.

"There's not a lot of large projects. Institutional work is what is out there now - higher ed, health care, and public works," Daniel Dirscherl, general manager at Hunter Roberts Construction Group L.L.C.'s Philadelphia office, told me.

Cranes remain busy at the University of Pennsylvania, though "the economy has impacted us - large gifts in particular have slowed," vice president Anne Pagageorge told me.

Work is nearly done on three large facilities, totaling $1 billion, at Penn's medical campus along 34th Street, though a projected Children's Hospital of Philadelphia building nearby remains a hole in the ground.

The next generation of Penn projects includes $46.5 million Penn Park next to the Schuylkill, and $8 million Shoemaker Green by the Palestra, both due next year; the $80 million Krishna P. Singh Nanotechnology Center, an expansion of Penn's science and engineering campus, at 32d and Walnut, and $34 million Golkin Hall at the Law School, due in 2012.

If you have the money, it's a good time to build. For example, "instead of carpet, we may get terrazzo," and a planned open field will now sprout NCAA Division I-quality softball fields, thanks to cheaper materials or better job prices, said Mike Dausch, executive director of Penn's design and construction group.

That doesn't mean contractors are giving up profits, said Dirscherl of Hunter Roberts, whose clients include Penn. "If you're a contractor who has been working 100 workers, when you have to go down to just 30 or 40 workers, they're more controllable and predictable," he told me. "Your efficiency and productivity go up, and you can work for a little less."

Spectrum go boom

The first phase of the retail center that would replace the old South Philly arena will be bars and restaurants, to compete for the post-game and post-concert trade with neighborhood standards such as McFadden's and Chickie's & Pete's.

Turf and toll war

The Pennsylvania Department of Transportation has demanded that the Pennsylvania Turnpike Commission pay PennDot $118 million by Sept. 18 or it will force "a unanimous vote of all commissioners" on future decisions.

That means veto power on the turnpike board for PennDot boss Allen D. Biehler. Details of the demands were disclosed when the Turnpike Commission updated paperwork for its planned $600 million bond borrowing.

Turnpike spokesman Carl DeFebo says the commission doesn't believe it owes what PennDot says, but it has to let potential investors know, in case it has to raise the money through higher tolls.

PennDot officials, who've been pressing state government to find more repair money somewhere since lease, tax, and I-80 toll projects have failed, said they didn't want to talk about it.